The Overnight Report: Post Election Blues

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US markets reversed the post election gains, led by a sell-off in technology.

Suddenly, market anxiety is specifically focusing on data centre adjacent stocks with the Democrat sweep likely to slow down further development.

The Australian market rallied sharply on Thursday, recording its best day since April 2025.

On Friday morning, ASX200 futures are pointing to a weaker start, albeit not as severe as the US market shakedown.

World Overnight
SPI Overnight	9029.00	– 49.00	– 0.54%
S&P ASX 200	9065.10	+ 230.60	2.61%
S&P500	7353.73	– 334.89	– 4.36%
Nasdaq Comp	24315.00	– 1421.52	– 5.52%
DJIA	51523.06	– 1833.06	– 3.44%
S&P500 VIX	26.54	+ 9.93	59.78%
US 10-year yield	4.84	– 0.06	– 1.16%
USD Index	101.58	+ 0.07	0.07%
FTSE100	10782.66	– 46.55	– 0.43%
DAX30	26325.01	– 112.66	– 0.43%

Good Morning,

The Australian market rallied 230.6 points to 9065.10, or 2.61% to record its biggest one-day rise in 1.5 years and the fourth biggest one day rise in the five years since 2021.

National Australia Bank ((NAB)) posted worse than expected results and its shares weighed on the banking sector.

InfoTech was yesterday’s top performing sector, up over 10%, with NextDC ((NXT)) shares up over 50% as Goodman Group ((GMG)) and Digital Realty were buying up to 9.90% of the data centre operator’s equity.

Materials also rallied sharply higher, up 7.55%, carried by a robust performance from gold stocks.

Citi on GPT Group ((GPT)):

“GPT delivered a clean Q3 operational update with strong performance across all three segments — retail at 99.7% occupancy, logistics at 98.7%, and office progressing steadily at 92.8%.

“Guidance of ~35.4 cps FFO (+4% on FY25) was reaffirmed. We view GPT as a sector safe haven: its diversified, high-quality portfolio is insulated from the risks mounting elsewhere — specifically the private credit stress emerging in residential development and execution risk in the broader sector.

“The David Jones receivership exposure ($4m gross rent, 0.6% of FFO) is immaterial. The acquisition of 66 Eagle Street, Brisbane ($380m, 95.5% leased) further anchors the platform in a high-conviction market.

“Despite this delivery, GPT trades at an ~8.6–10% discount to its June 2026 NTA of $5.61 — a valuation anomaly we view as difficult to justify given the quality and consistency of its earnings.”

RBC Capital on NextDC ((NXT)):

“Digital Realty and Goodman Group’s acquisition of up to 9.9% of NextDC is validation that fundamental value exists in NextDC shares.

“We recently took a conservative approach to valuation while NextDC worked through delays to its M3 data centre development. We now take a more constructive view, and increase our valuation to $11/share (+22%).

“From here, upside may exist if 1) NextDC can de-risk part or all of its development pipeline (e.g. development partnerships); 2) NextDC can provide confidence that delays to its M3 development are <6 months; or 3) macroeconomic conditions improve, driving lower interest rates.”

Macquarie Group ((MQG)) announces its 1H27 earnings this morning.

For more details and to stay in touch with which companies are reporting, AGMs and going ex-dividend, check out the FNArena Calendar https://fnarena.com/index.php/financial-news/calendar/

Market Overview, J.L. Bernstein extract

The Nasdaq Is Now in a Correction

Chip stocks had their worst day since March 2020 and dragged the Nasdaq into a correction.

It now sits more than a tenth below its Oct. 6 record.

The S&P500 fell the most since the April 2025 tariff crash, and the seven biggest tech stocks lost about -US$1.1 trillion in value, a one-day record.

The equal-weight S&P500, where every company counts the same, is now ahead of the regular index for the year.

Borrowers Took the Worst of It CoreWeave

$CRWV rents Nvidia chips to AI companies and repays its loans with money from future contracts.

Any delay in new data centers puts those payments at risk, and the stock has lost half its value in a month.

Its 2032 bonds traded as low as USD74.75 cents on the dollar today.

Bond buyers now want more than double the extra interest over Treasurys that they wanted in June.

Hedge Funds Rushed to Lock In Gains

Nomura’s Charlie McElligott said hedge funds are cashing in this year’s AI winners before year-end, with no sudden change in the businesses behind them.

He called it “shooting the generals,” meaning traders sell their biggest winners first.

Funds that triple the daily move in chip stocks made it worse, and one of them took in about US$9 billion since Oct. 2.

When prices fall, those investors rush to cut their losses, which adds more selling.

ANZ Bank, Australian Morning Focus, extract

US equity markets sold off sharply, led by technology stocks, amid concerns that the Democrats’ sweep of Congress will lead to a slowdown in the AI buildout.

The S&P500 fell -4.36% and Nasdaq down -5.52%.

The EuroStoxx50 ended its session down -0.5%, while the FTSE100 lost -0.4%.

The yield on the US 10y note fell around -0.8bp to 4.83%.

WTI lifted 5% to US$91/bbl. Gold was weaker at US$4,113.8/oz.

US Initial Jobless Claims fell to 189k in the week ended 31 October, below the consensus of 196k. Taken together with the solid JOLTS report earlier this week, attention now turns to whether nonfarm payrolls (due this evening AEDT) validate the signal of improving labour market conditions.

Separately, US labour productivity rose 3.6% saar in Q3. The trend in labour productivity since Q4 2022 has steepened sharply, coinciding with the AI investment boom, which is unsurprising given the scale of capital deepening related to the AI buildout.

Rather than reflecting broad-based gains associated with AI adoption, strong productivity growth has been heavily concentrated in a select few industries.

Bank of England delivered a 25bp hike, its first since 2023. The MPC voted 8:1 in favour, with Catherine Mann dissenting in favour of a 50bp hike. Most members viewed today’s move as an ‘insurance hike’.

While additional tightening is likely, we do not expect a more extensive tightening cycle and continue to forecast just one further 25bp rate hike in Q1 next year.

Given extensive spare capacity across the economy, no evidence that wages have responded to higher inflation and the continued downward trend in services inflation, we think today’s decision was primarily about signalling the MPC’s commitment to its inflation target.

It is worth noting that the Bank of England’s policy stance was already restrictive prior to today’s decision. In our view, market expectations for three additional rate hikes over the next year are excessive.

Chips, AI hits as midterms panic selling drags down AI’s strongest names, Nigel Green, deVere Group

The chip selloff triggered by the Democrats’ midterm sweep is likely to deepen in the coming days as investors price in higher energy and financing costs for the AI buildout, though indiscriminate selling now risks punishing the sector’s strongest companies alongside its weakest.

The -5.5% fall in the Nasdaq Composite has fallen into correction territory more than -10% below last month’s record and erasing Wednesday’s rebound.

The market now has to price something it’s largely ignored for two years, which is political resistance to the physical side of AI.

Power, water, land and the cost of financing all of it via borrowing suddenly look less certain and it is expected this repricing to take more than a session or two.

Democrats now hold comfortable majorities in both the House and the Senate, along with key governorships won partly on pledges to rein in power-hungry data centres.

US electricity costs have risen around 5% over the past year, and voters faced 34 ballot measures tied to data centres this cycle.

The open question is how much of the worst case is already in the price?

The steepest losses fall on specialist cloud operators renting out AI computing power, with some down between -12% and -17%.

Consumer staples, healthcare and utilities move higher as money appears to rotate toward defensive sectors.

Some Democratic states will probably try to slow approvals. At federal level, President Trump still holds the veto pen, which in my view makes sweeping national restrictions difficult.

Governors also face a trade-off, since these sites can bring construction jobs, permanent jobs and tax revenue. I suspect some will look for terms rather than outright bans, but local opposition has proved stubborn and could harden further.

Valuations complicate the bearish case. Semiconductor shares trade at roughly 13.5 times forward earnings, below the broader S&P500 at around 18.5, and analysts expect sector earnings to more than double this year.

Selling the strongest chipmakers as though AI demand had evaporated looks overdone.

What is believed to be changing is the market’s tolerance. Companies with heavy debt, thin margins, and projects waiting on a grid connection look most vulnerable.

Those with solid balance sheets and earnings they can actually show are likely to be judged very differently once the panic subsides.

Volatility is expected to persist for some time, and it could intensify if further earnings disappoint.

Further out, divided government has often proved tolerable for equities, and AI investment plans remain substantial.

A recovery later in the year is indeed very possible, but it would depend on earnings holding up and on policy proving less hostile than investors currently fear.

China: Monetary policy modernisation accelerates, Oxford Economics, extract

• The People’s Bank of China (PBoC) formally began conducting daily overnight reverse repo operations in November, marking a formal transition towards an overnight policy-rate framework that PBoC Governor Pan Gongsheng outlined in October. The move reinforces China’s transition towards a more market-oriented and interest rate-based modern monetary policy framework. We plan to adopt the overnight reverse repo rate as China’s policy-rate benchmark in our Global Economic Model in the coming months.

• The transition itself is unlikely to deliver substantial near-term stimulus and hence has very limited impact on our near-term growth outlook. Persistently subdued inflation could further constrain its effectiveness by keeping real interest rates elevated, and weak private credit demand continues to limit the effectiveness of lower borrowing costs in stimulating the economy.

• Nonetheless, our empirical analysis provides tentative evidence of strengthening monetary transmission as the reforms progress, particularly at the short end of the government bond yield curve. That said, the transmission to longer maturities remains much weaker.

• The longer-term effectiveness of these reforms will depend on the broader adoption of market-based interest rate benchmarks, more predictable policy communications, and better coordination with structural monetary facilities and fiscal policy.

Corporate news in Australia:

• Goodman Group ((GMG)) and Digital Realty acquire a combined 7.5% stake in NextDC ((NXT)) in a rapid share raid, raising speculation of a potential full takeover despite regulatory and strategic hurdles
• NextDC ((NXT)) appoints Barrenjoey, UBS, Cadence Advisory and Mallesons as advisers following the Goodman and Digital Realty share raid
• Humm Group ((HUM)) investigates an alleged leak of market-sensitive information regarding its Canadian exit while holding discussions with Macquarie Group ((MQG)) and other parties over a potential sale of its commercial lending business
• MA Financial ((MAF))-owned IP Generation faces exposure to the collapse of David Jones, with rival retailers potentially interested in the Bourke Street flagship property
• Anchorage Capital Partners considers acquiring a smaller, restructured David Jones out of administration
• DigitalBridge considers bringing Australian superannuation funds into its proposed $3bn acquisition of Ausgrid’s smart metering business Plus ES as equity co-investors
• Macquarie Group ((MQG)) moves to sell its remaining 20% stake in Spanish fibre operator Onivia to Aberdeen and Arjun Infrastructure in a transaction valuing the business at more than $2bn
• David Jones enters voluntary administration and receivership following mounting debts and sustained losses, with McGrathNicol and FTI Consulting appointed to oversee restructuring options
• Hilco Capital’s exposure to distressed Australian retailers comes under scrutiny following the collapse of David Jones and Cue Clothing, with the latter also entering receivership
• AustralianSuper secures an AAA credit rating from Moody’s, becoming the first Australian superannuation fund to achieve the highest rating, potentially improving access to debt markets
• Winning Group prepares for a potential IPO following an $80m shareholder dividend and divestment of non-core assets, with former Super Retail Group CEO Anthony Heraghty positioned for a multimillion-dollar windfall
• Bega Group ((BGA)) accelerates its $110m manufacturing investment to expand production capacity by 25% in response to growing demand for protein yoghurt

On the calendar today:

-JP Sep Cash earnings same sample base y/y

-JP Sep Earnings

-EZ Sep Retail sales

-US Nov Uni Mich sentiment (prelim)

-US Oct Average hourly earnings

-US Oct Non-farm payrolls

-US Oct Unemployment

-US Sep Consumer credit

-COLES GROUP LIMITED ((COL)) AGM

-CLINUVEL PHARMACEUTICALS LIMITED ((CUV)) AGM

-JAMES HARDIE INDUSTRIES PLC ((JHX)) Q2 earnings report

-JUMBO INTERACTIVE LIMITED ((JIN)) AGM

-MACQUARIE GROUP LIMITED ((MQG)) 1H27 earnings report

-NINE ENTERTAINMENT CO. HOLDINGS LIMITED ((NEC)) AGM

-NEW MURCHISON GOLD LIMITED ((NMG)) ex-div 0.25c (100%)

-QANTAS AIRWAYS LIMITED ((QAN)) AGM

-RECCE PHARMACEUTICALS LIMITED ((RCE)) AGM

-SPARK NEW ZEALAND LIMITED ((SPK)) AGM

-STARPHARMA HOLDINGS LIMITED ((SPL)) AGM

-TOURISM HOLDINGS LIMITED ((THL)) AGM

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

Spot Metals,Minerals & Energy Futures
Gold (oz)	4097.16	+ 33.81	0.83%
Silver (oz)	52.00	– 0.24	– 0.46%
Copper (lb)	6.18	– 0.20	– 3.13%
Aluminium (lb)	1.42	+ 0.02	1.72%
Nickel (lb)	7.02	+ 0.12	1.78%
Zinc (lb)	1.76	+ 0.00	0.16%
West Texas Crude	90.73	+ 2.01	2.27%
Brent Crude	98.52	+ 3.34	3.51%
Iron Ore (t)	93.12	+ 1.17	1.27%

The Australian share market over the past thirty days…

Index	05 Nov 2026	Week To Date	Month To Date (Nov)	Quarter To Date (Oct-Dec)	Year To Date (2026)
S&P ASX 200 (ex-div)	9065.10	1.76%	1.76%	3.14%	4.03%

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
4DX	4DMedical	Upgrade to Hold from Sell	Ord Minnett
AMP	AMP	Downgrade to Hold from Buy	Ord Minnett
BOE	Boss Energy	Upgrade to Trim from Sell	Morgans
CIP	Centuria Industrial REIT	Downgrade to Neutral from Buy	UBS
CSC	Capstone Copper	Upgrade to Buy from Hold	Ord Minnett
CSL	CSL	Downgrade to Hold from Buy	Morgans
DYL	Deep Yellow	Downgrade to Speculative Buy from Buy	Ord Minnett
GMG	Goodman Group	Upgrade to Buy from Accumulate	Morgans
RFF	Rural Funds	Downgrade to Neutral from Buy	UBS
RMD	ResMed	Downgrade to Accumulate from Buy	Morgans
RMY	RMA Global	Downgrade to Speculative Hold from Speculative Buy	Bell Potter
TTX	Tetratherix	Upgrade to Lighten from Sell	Ord Minnett

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website. Click here. (Subscribers can access prices on the website.)

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